Andrew Brem is no stranger to business disruption. During his time as managing director of commercial and product development at British Gas, he launched the Hive app, a smart thermostat for digitally and remotely controlling home heating and lighting. In his current role with Aviva, he is able to draw similar parallels, explaining: “You’ve got a business which is respected but not loved, and a product which is required but not loved.”
Brem’s retail background was instrumental in his appointment as chief digital officer at Aviva. As he recalls: “For me, what was so compelling was the sense that the insurance and related financial services industry is ripe for massive transformation. It’s an incredibly 'un-retail' experience, in that you have to answer a load of questions, at the end of which you just beg for a quotation and then you go back and forth. The revolution in customer experience is for us to say – we already know you and can infer most of the other things we need to know.”
He continues: “We see digital as both a business and a set of capabilities that we can apply across the entire business. Our interpretation is that it is about customer engagement; customers making smart decisions about the things that they buy.” He adds firmly: “We are aligned with our consumers in that we want to help them prevent bad things happening rather than fix them when they do happen. Our purpose is to free people from the fear of uncertainty.”
We meet Brem in Aviva’s Digital Garage in the heart of London’s Tech City in Shoreditch.
The trendy location is in keeping with Brem’s desire to move away from the more traditional culture of the insurance industry. He explains: “We’ve got digital activity in all sorts of places, but our garages in London, Singapore and Toronto are where we bring together all our key digital skill sets. We also run businesses from our garages and that’s a cultural point. Yes, we stretch our thinking, but I remind colleagues that it’s not all about tomorrow’s consumers, it’s about today’s and yesterday’s ones; we are late to the party, so I really want this to be a very practical place.”
He says they also partner with or make investments in start-ups, “which is more complicated in financial services because of the regulation, underwriting and the way the industry is set up”.
Brem is excited about the opportunities of mobile phone technology. “The barrier for engagement is lower, in that mobiles are great for nibbling at things, spending a few minutes here or there. Some of the digital experiences that we’ve launched might only take 10 minutes, but they start you on a journey of intelligent engagement.” He sees this as particularly helpful for some of the complex decisions around savings and investments. “For me, app and mobile are morphing into the same thing; the mobile internet is rapidly becoming as good as a native app.”
He is keen to explain the power of providing useful things to customers, such as the Aviva Drive app, which measures driving skills. “The purpose is serious because we want people to drive safely. You can think of that as a theme; socially engaging experiences that on one level are just interesting, funny or sharable, but on another level are educational and deadly serious. That’s what’s been lacking in financial services.”
Home Checker is another innovation, informing homebuyers about their new neighbourhood. Brem says:
“I don’t want anything back, apart from people saying, ‘those Aviva guys are thinking about us for once’. If we do that 100 times, we will fundamentally change the role of our business in consumers’ lives.” Brem explains how most of the tools available are based on numbers, like how much money will you need after retirement. “That’s not how most people think, but if you say what kind of a house or apartment you might live in, what sort of support do you want to give your children, then people can make meaningful choices.”
In Shape My Future, they have a mobile experience to help people plan how much they need to save to achieve their lifestyle aspirations in retirement. There is also a little quiz to determine savings behaviour, “at the end of which you’re matched to one of nine superhero behavioural types, funny and quirky but based on a statistically significant survey”. Their chief designer previously worked for the video game franchise Call of Duty, relevant since “gaming psychology can be really useful; behavioural tools used for good rather than evil, but without them people are just not doing anything at all”.
Inevitably, we turn to robo-advice, which Brem believes means different things to different people. “For me, it is using a well designed set of behavioural questions to figure out a consumer’s risk appetite, designing an investment portfolio to meet that appetite and then auto-rebalancing it.” However, he adds: “I think that where it is less developed is around the complex choices between savings accumulation and decumulation, and I do believe that digital in its many guises has a role to play in helping consumers make good choices around that period of their lives.”
“We talk about pre-merchandising; on the shelf are the things you already have and then the things that you don’t have but could do. In other industries that is just convenience, but for us it’s cleverer than that because we’re trying to answer the questions that we would otherwise have to ask customers. We call it ultimate tailoring and one-click convenience.” Brem considers this as being more about engagement rather than cross-selling. “By giving consumers things that are genuinely useful, along with good propositions at the right price, why would they not choose us in due course?
“Our industry has been quite traditional in terms of marketing and cross-selling, but consumers now expect you to pop up at the most relevant point and in the most relevant way to them, which is not necessarily on your own website.” He clarifies that this targeted approach to customer engagement uses customer analytics and internal or external data. The other aspect of data analytics relates to risk and pricing, where they find interesting correlations of risk between apparently unrelated products, such as savings behaviour and motor insurance. Brem explains: “There are companies other than insurers that have access to third-party or public data, are brilliant at analytics and may have well trusted brands. This could be questioning the role of insurers existentially, and that’s why I want to be part of that.”
Opportunities and challenges
Internationally, Brem is equally ambitious and efficient. “We plan for global deployment, but we don’t deploy the same things everywhere. More to the point, our strategy is not identical everywhere.” He points out that in the UK the digital strategy is focused on direct-to-consumer sales, whereas in other markets they work through tied agents or with affinity partners. “What surprises me the most is that the things people buy are really rather different. I don’t think it’s because the consumers are so different, but more that there are other interventions in the industry that has caused it to be different.
“Aviva has a very interesting presence in Asia, and this is where I see the most groundbreaking digital behaviour. It is partly because you have a whole generation of consumers that never had fixed internet and they do everything on their phones.” Brem adds: “It’s interesting that there is not one place that has it all, but with us being in Silicon Valley, London and Asia, we are hooked into the key digital ecosystems of finTech.”
Brem comments more generally on the role of technology: “Like many big insurance companies, we have a myriad of back-end systems that until recently didn’t talk to each other, so we had to connect them up. More revolutionary is the way our front-end digital developers work.” He explains that they work in multidisciplinary teams and in short sprints, typically one to two weeks, so they can quickly test and obtain feedback from consumers. He also describes how application programming interfaces (APIs) have been digital enablers, “making it much easier for people to connect up systems without opening the bonnet”.
This leads us neatly onto the introduction of the pensions dashboard, collating people’s pension savings across multiple providers. Brem is enthusiastic: “The fundamental idea is brilliant for consumers and one that we embrace.” However, he thinks in focusing solely on pensions it does not go far enough, noting that there are several similar options in the US and UK that connect multiple credit and debit card accounts. He believes the industry could do more to combine products of different types, such as general and life assurance. Having different regulators does not help, but to consumers the distinction is not important.
The challenges involved in the digital transformation are not underestimated by the CEO, Mark Wilson, who in the early days told Brem in all seriousness “I haven’t had nearly enough complaints about you” – reinforcing how digital is expected to disrupt the business. Brem says they talk of the transformation as being 2% complete; the first step being for all 33 million customers to have a digital relationship with the company and “for them to find that experience relevant, engaging, entertaining and educational, so they come back frequently”. He adds: “Many consumers are more open to trusting new brands than in the past, so it’s incumbent on us to do a damn good job pretty fast to get loved.”
We finish by asking Brem what advice he has for aspiring entrepreneurs. “Have no fear of failure, try and try again. A lot of us are perfectionists and think we’ve got to get it right before it goes out there, but that’s not the spirit of an entrepreneur. It’s also going to take longer than you think. Because you can build an app in a weekend, people think that you can build a great business in a weekend.”
Good advice from a maverick who knows what it takes to succeed in a fast-moving business world.
Andrew Brem is chief digital officer of Aviva